The state Industrial Commission is the agency responsible for ensuring that employers obtain and maintain workers’ compensation insurance as required by the law of the state of North Carolina. However, it only gets involved after an employee has been injured and then is left with no income and increasingly expensive medical costs. According to the Charlotte Observer, the Industrial Commission does not try to determine which businesses have failed to purchase workers’ compensation insurance and which businesses have allowed their workers’ compensation coverage to lapse.

Under North Carolina law, businesses that have more than three employees are required to purchase workers’ compensation insurance. The businesses, however, are only required to tell the Industrial Commission that they are insured. Besides a simple notification, there is no enforcement, no way of making sure that businesses have actually purchased the required workers’ compensation insurance.

While recently, the North Carolina General Assembly has attempted to reform the state workers’ compensation law, making it more affordable for employers, the revisions and amendments to the law failed to address what happens when employers do not purchase workers’ compensation insurance. Other lobby groups, such as the North Carolina Homebuilders Association, have begun pushing for stricter enforcement of the insurance requirement and punishment for those businesses that do not comply. The branch of the Industrial Commission charged with dealing with those businesses that do not have workers’ compensation insurance only focus on collecting the necessary money from the business rather than punishing the business for its violation of the law.

There are enforcement mechanisms in place, but they apparently are not being adequately utilized by the Industrial Commission. According to North Carolina law, a knowing failure to obtain workers’ compensation insurance is a Class H felony. Employers can also be fined nearly $100.00 per day for every day that they are without the insurance, but the Industrial Commission often waives these penalties and fines if the employer obtains insurance and settles with the employee. Thus, there seems to be no incentive for employers to maintain coverage where there is no real punishment for failing to be insured.